Rupee halts 4-day rally on RBI policy eve, down 7 paise

Snapping its four-day winning run, the rupee on Tuesdayturned weaker by 7 paise to end at 64.43 against the US dollar amid caution ahead of the outcome of the RBI’s bi-monthly policy review meet tomorrow.

Fresh dollar purchases by state-run-banks on behalf of corporate clients and a retreat in local equities after record—setting run also weighed on the forex trade.

The rupee had gained 30 paise over the last four sessions against the American currency.

Meanwhile, geopolitical tensions took on more significance following the shock move by four US Arab allies led by Saudi Arabia to isolate Qatar.

Expectations for an interest rate cut by the apex bank in its Wednesday’s policy meet to rejuvenate the sagging economy



against the backdrop of softening inflations somewhat cushioned the rupee sentiment, a forex dealer said.

The domestic unit opened firm at 64.32 from overnight closing level of 64.36 at the Interbank Foreign Exchange (Forex) Market and advanced further to 64.31 due to initial dollar selling.

But, soon it washed out initial gains and dropped to touch an intra—day low of 64.45 on the back of fag—end dollar demand from importers before concluding at 64.43, showing a loss of 7 paise, or 0.11 per cent.

The RBI, meanwhile, fixed the reference rate for the dollar at 64.3516 and for the euro at 72.5178.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 476.64 crore yesterday, as per provisional data.